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New homes: who is building what in 2014?

The recent rise in house prices and rents in Dublin is being fuelled by a lack of supply, particularly of family homes. Some building projects are well underway again – but can they really satisfy demand in the capital, and what can we expect?

The new homes market has been dormant for some time, but with property price hikes reflecting pent-up demand in some areas, there are clear signs of activity in the capital. As the traditional spring selling season kicks off, what are the trends on the new homes front?

Firstly, brand new developments are rare, and most new launches tend to be additional phases of existing developments – College Square in Terenure and Hanstead in Lucan to name but two.

Secondly, some commentators argue that there simply are not enough new properties being built. The Construction Industry Federation (CIF), for example, is forecasting total construction this year to be of the order of about 10,000 units in the Republic, up from about 8,000 last year.

But according to Hubert Fitzpatrick, director of housing and planning services at the CIF: “In the region of 20,000-25,000 new units are required annually to cater for demographic growth and the population generally.”

He adds that the lack of development comes down to a shortage of development finance; the perceived difficulty in securing mortgage finance for homeowners; and the all-in construction costs, which can exceed the market value of a development.

“There is still a mismatch in terms of overall construction costs and sale prices,” he says.

Competition for land is another factor. Ivan Gaine, head of new homes at Sherry FitzGerald, says there is “really strong demand” for land among cash-rich builders and investors, particularly for smaller sites”.

For those without the cash, funding remains difficult. While banks may be willing to put up 60 per cent of development costs, this leaves a substantial shortfall.

As a result, many of the next generation of builders are being funded by private equity, as Helen Moore, director of new homes with Lisney, points out.

“They tend to buy small sites and funding is in the region of between €100,000 and €3 million per investor,” she says.

New Generation – led by Greg Kavanagh – is behind a number of new developments and is a case in point. It is understood to have attracted investment from US private equity group Starwood.

Rental marketNama is also providing funding for the completion of a number of developments.

Another issue at play is the strength of the rental market, with some developers opting to hold onto property rather than sell it on immediately.

For example, at the newly completed St Raphaela’s development in Stillorgan, two- and three-bedroom apartments are available to let from next month, from €1,375-€1,800 a month.

For developers who fear that the market value of the properties may still not meet the costs of development, such a move can be a long-term play.

One industry observer also notes that there may be an advantage in holding onto property, as the capital gains tax (CGT) exemption for seven years for property bought between December 7th, 2011 and December 31st, 2014, also applies to residential property.

Ready to go: developments scheduled to launch in Dublin in the coming monthsSouth DublinHoneypark, Dún LaoghaireBuilder CosgravesSelling agent Hooke & MacDonaldWhat’s on offer So far, 65 houses have been sold at this development on the old Dún Laoghaire Golf Course site. The latest phase, “Brickfield at Honeypark”, is due to launch in February. Twenty-nine four- and five-bed houses will be available initially, with 60 in total. How much? To be confirmed (TBC) by sellers; prices to date were from €480,000-€630,000

Belmont, StepasideBuilder New GenerationSelling agent Sherry FitzGeraldWhat’s on offer Launched in 2013, this development will total 300 houses. The first phase has recorded 70 sales, and another phase of three- and four-bed houses is due to launch in February. How much? Prices to date were €335,000-€350,000 for three-beds and about €400,000 for four beds; a slight increase is expected

Traverslea, GlenagearyBuilder O’Malley HomesSelling agent SavillsWhat’s on offer New launch in existing development of six two-bed apartments, planned for March.How much? Around €400,000

College Square, TerenureBuilder BallymoreSelling agent SavillsWhat’s on offer A new phase of 42 four- and five-bed houses and eight duplex/ apartments is set to launch in April.How much? Five-beds were on sale at €650,000 in last phase

St Raphaela’s Apartments, StillorganBuilder Shannon HomesSelling agent Hooke & MacDonaldWhat’s on offer 101 apartments nearing completion. A number of two- and three- bedroom apartments will be available for letting from February.How much? From €1,375- €1,800 a month

Castlepark, DalkeyBuilder Receiver saleSelling agent Sherry FitzGeraldWhat’s on offer Scheme will comprise of 50 units in total, 17 were sold in the autumn. New phase of 10 apartments due in late February/early MarchHow much? Late €300,000 for two-bed apartments, “marginally up” on original launch, but for slightly different unit sizes

Stocking Wood, RathfarnhamBuilder KingscroftSelling agent Sherry FitzGeraldWhat’s on offer Originally owned by Deane Homes, and sold on by Ulster Bank to Kingscroft. About 22 five-bedroom houses are due to launch at end Feb/ early March.How much? About €450,000

The Grange, StillorganBuilder Nama is providing funding of €14 million for the completion of Block GWhat’s on offer 120 apartments to be completed by the third quarter of 2014. Nama says it will be up to the receiver whether to sell or rent the apartments.How much? TBC, but unlikely to be anywhere near original prices for two-beds which were of the order of €550,000.

Beacon South Quarter, Sandyford Builder Nama is providing €10.6 million in development funding for the completion of Block B2A. Again, it’s not yet known whether the receiver will rent or sell the properties.What’s on offer 85 apartments due for completion in March 2014

Trimbleston, GoatstownBuilder SorahanWhat’s on offer A new launch of 89 one-,two- and three-bed apartments to be launched in late spring.How much? TBC. In 2007 two-beds were asking €610,000

St Georges, DúnLaoghaireBuilder Shannon HomesWhat’s on offer 83 apartments and two retail units due to be completed in the second half of the year. How much? Developer hasn’t yet decided whether to rent or sell the apartments,

Sleepy Hollow, MalahideBuilder Kinsealy HomesSelling agent Property Team Noel Kelly/Knight FrankWhat’s on offer Scheme of 22 townhouses/ detached houses and bungalows. Phase 1, consisting of 12 units, sold out. Ten remaining units will launch in April/MayHow much? Prices for original phase went from €310,000 up to €550,000 for large four-beds. Prices are expected to “go up a little” for new phase

Unnamed development, Kinsealy Lane, Malahide Builder Carroll Estates Selling agent Property Team Noel Kelly/Knight FrankWhat’s on offer New development of 78 houses; 38 detached houses will come to the market in around May How much? About €650,000

The Cedars, Ridgewood, SwordsBuilder MKN Property GroupWhat’s on offer Forty properties to be released in 2014 – 28 four-bed houses; six three-bed houses; and six two-bed houses. How much? TBC

Miller’s Glen, near Applewood, Swords Builder Gannon HomesSelling agent Sherry FitzGeraldWhat’s on offer A mix of 60 two-, three- and four-bed semi-detached family homes to be launched after Easter. How much? Starting at €250k

Unnamed development, Castleknock Builder Flynn & O’FlahertySelling agent Hooke & MacDonaldWhat’s on offer The builders are getting ready to start work on 88 three- and four-bedroom houses on Castleknock Road, on the site of a former garden centre which adjoins their Phoenix Park Racecourse site. Showhouse likely by April/MayHow much? TBC

The Grove at Hanstead, LucanBuilder Hugh McGreevy & Sons Selling agent Sherry FitzGeraldb The Grove was first launched in February 2012. Out of 64 units in the entire scheme, just six are left, including a two-bed duplex; a two-bed townhouse; and a three-bed mid terrace.How much? Three beds were first launched at €180,000, now they’re on at €229,950, with prices across the scheme ranging from €154,950 to €229,950.

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